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Wednesday, 7 June 2017

TWILIGHT OF THE AMERICAN CENTURY AND CHINESE ASCENDANCY

Abstract

The more evidence we have that the American century of
international hegemony is waning because of an increasingly weaker economy, the
more scholars and analysts of international political economy insist that the
21st century will not witness China’s global ascendancy. From prominent
academics to journalists there is a refusal to acknowledge structural shifts in
the global economy from West to East means that the US will be taking a back
seat to China. Skeptics point to everything from China’s aging population to
business debt and shadow banking problems, to political and social challenges
for the ruling Communist Party as proof that China’s ascendancy is a myth and
the American century will continue from the 20th to the 21st
without a serious Asian challenge.

Scholarly studies and Chinese government reports point
to a number of problem areas in the country, including political and business
corruption, a large percentage of the population living below the poverty line
along with a rural-urban living standards gap, ethnic minority issues, legal
reform and cleaning up the environment of decades of neglect. These are issues
that many other countries also facing, including India trying to compete with
China.

While all criticism is legitimate and the one-party
state is aware that it must address them, Western critics are obsessed that
China must embrace the Western bourgeois political model and the neoliberal economic
route in order for there to be an even playing field. At the core of criticism
is that Beijing is refusing to accept the post-WWII American-imposed “transformation
model”, and instead pursuing a quasi-statist centrally-planned modernization course
under five year plans by the one-party state.

Putting aside wishful thinking about imposing a US transformation
model on China, shifts in the core of the capitalist system are not only
evident by looking at GDP statistics and future prospects, but share of global
trade and longer term the direction of US policies vs. those of China and how
such policies would impact the global power structure ahead. While there are
many studies indicating China will encounter trouble spots ahead that will
permit the US to continue its global economic hegemony well into this century,
the US will be confronting even more serious challenges than China and the
future is already upon us. On balance and in the absence of a major war in Asia
that could change everything for the entire world, established trends point
toward steady US economic decline and Chinese ascendancy.

Global Economic Leadership
Shifts

Evolving since
the 15th century, capitalism as a world system lacked coordination
under the aegis of international institutional structures. To manage the world
economy under its hegemony, in the mid-1940s the US established mechanisms such
as the International Monetary Fund (IMF), International Bank for Reconstruction
and Development (IBRD now part of the World Bank Group)followed by the GeneralAgreement on Tariffs and Trade (1948) GATT
now World Trade Organization (WTO). Leadership within the international
institutional structure mitigates the effects of cyclical expansions and
contractions through coordination of central bank monetary policy but also
trade and fiscal policies, thus essential to achieve a modicum of equilibrium
rather than exacerbating the contraction.

The absence of
international leadership in coordinating monetary, trade and investment
policies was partly to blame for the Great Depression of 1929 when retrenchment
was inevitable combined with strong propensity by governments and capitalists
to pull policy toward economic nationalism and away from global integration as
a means of strengthening the home base. Invariably international financial and
trade institutions have as a goal to strength capital especially in the core
countries where it is strongest.

Disequilibrium
on a world scale that took place in the 1930s forced core nations into a frenzy
to retain as much of their global market share as possible against competitors.
Only a decade after WWI, the Great Depression further weakened the core
countries of international capitalism in northwest Europe resulting in economic
power shift to the US positioned to assume both military leadership in WWII and
global economic leadership following the war.

Chronic balance
of payments deficits, deliberately under President Harry S. Truman to
reindustrialize Western Europe, Japan, South Korea and Taiwan, combined with
“Military Keynesianism” – deficit financing by allowing the defense sector to
absorb surplus capital – were adopted for economic and geopolitical
considerations but with the result of setting the stage for decline. The US
creation of strong trade and strategic partners took place against the
background of the nascent Cold War when both USSR and China emerged as military
rivals challenging the US-based capitalist world order.

The long-term
effects of postwar chronic balance of payments deficits resulting in higher public
debt, currently at $19 trillion or about 106% of GDP, have taken their toll on
America’s core position in the world economy. More ominous than public debt and
chronic balance of payments deficits, US policies and current structure of its
economy point to slow growth and continued erosion of US share of global GDP. Just
the opposite holds true for China, especially as the US is more determined than
ever to rely on “Military Keynesianism” at a point in its history when
debt-to-GDP ratio, which averaged about 62% from 1945 to the present, is the
highest it has been since 1945 when it hit 112.7%.

Reducing the
balance of payments and budgetary deficits through GDP growth above 2- to 2.5%
seems highly unlikely in the next five years and probably longer. This is the
optimistic scenario because at some point in the 2020s cyclical economic
contraction is inevitable and it will result in runaway public debt and weaker
dollar. The result will be further consolidation of the many economic centers
especially China as catalytic to global trade and growth. All governments and
corporations recognize that the US leadership role in the world system has
diminished and it is highly unlikely to recapture its preeminent position of
the early Cold War era when the dollar was pegged to gold and its value held
steady.

By contrast, even
if half of China’s global economic development and global integration plans
come to fruition, ascendancy is inevitable because it has laid the foundations
for future growth on a model that appeals to governments and businesses. Narrowly
focused on militarist policies and using its defense hegemony as leverage to
retain its preeminent role rather than focusing on the civilian economy, the US
is hastening China’s global ascendancy as much as US portfolio and direct
investment in China.

China’s economic
growth prospects in the next ten years are estimated above 6%, while European and
American growth prospects are below 2%. Even more significant, the entire
Western World has been experiencing downward socioeconomic mobility and lower
living standards for the middle class with fewer upward mobility opportunities
in the next ten years. Even with problems of corruption and political
challenges to the one-party state, China is expected to triple its middle class
population over the same period. This factor alone spells continued optimism
for China despite inevitable cycles of contraction and political internal and
external hurdles along the way.

US Unilateralism, Economic
Nationalism and Militarism

America’s
withdrawal (1 June 2017) from the Paris Climate Accord raised serious concerns
within the country’s political and business elites and among allies worried
about President Trump’s unilateralism (pursuing
a policy and/or acting upon it without coordination and collaboration of other
countries). The concern among allies relying on American leadership reflects
general uneasiness because the government extends unilateralism beyond the
climate agreement and into economic nationalism. He demonstrated when he
rejected the Trans-Pacific Partnership (TPP) trade agreement not because it was
a bad deal for workers but because it did not provide favorable terms of trade
for the US.

In the age of
globalization that has benefited US multinational corporations, Trump has
repeatedly used economic nationalist rhetoric about unfair practices by trading
partners in the Western Hemisphere (Canada and Mexico under NAFTA) and the rest
of the world (from China to Germany). The implication is that the terms of
trade that historically favored the US now favor exporters to the US, although
the US negotiated and agreed to those terms. Rather than looking at US domestic
policies as impediments to growth, the Trump administration blames trade
partners for America’s chronic balance of payments deficits and loss of
high-paying jobs amid continued de-industrialization. Making US allies even
more apprehensive, Trump has cast doubt on the benefits of strategic alliances,
especially NATO to which members do not meet their GDP percentage quota
spending, thus raising the specter of isolationism.

The cumulative
effect of unilateralist, isolationist and economic nationalist rhetoric leaves
no doubt that the current administration has no use for Wilsonian
multilateralism as a foundation for foreign policy and foreign economic affairs.
On 6 June 2017, former president Barak Obama warned that Trump is moving
dangerously toward isolationism and erosion of Western values. Despite some
minor policy changes amid very sharp change in rhetoric by Trump in comparison
with Obama and even George W. Bush, the vast majority of US trade, investment,
strategic and foreign policies remain largely as they were under previous
administrations. Though they differ on the modalities, the goal of both political
parties to globalization is unchanged. Wall Street and the defense
establishment wholeheartedly support the same goals and so do both political
parties.

While Republican
and Democrat parties have pursued multilateralism since the Wilson
administration, both parties have practiced unilateralism within varying
degrees, no matter their public pronouncements about a commitment to multilateralism
as a Western value. As a core country in the capitalist system with
institutional obligations in the WTO, IMF and all international institutions
established to manage/coordinate the world economy since Bretton Woods, the US
is structurally locked into multilateralism no matter the deviations on
specific treaties such as the Paris Accord. Nevertheless, there are some
billionaires in Trump’s cabinet and his inner circle of advisers, like Commerce
Secretary Wilbur Ross, who question the very foundation of the American-based
Bretton Woods system because they believe that it serves surplus exporting
countries like China and Germany.

Combined with
economic nationalism and isolationist rhetoric, unilateralism even as symbolic
as the Paris Accord withdrawal inadvertently yields global leadership to China.
Sufficiently powerful economically to assume such a role, China does not
instigate but benefits from certain US policies that widen the global economic
power gap. In January 2017 at the Davos World Economic Forum, President Xi
Jing-ping raised the issue of global stability guaranteed by Beijing.

Portraying his
country as responsible and committed to global economic integration President
Xi assured all countries that they can rely on China to ensure stability and global
integration. Presumably, the message was that the world can no longer rely on
the US, not only because of Trump’s rhetoric, but owing to reckless bipartisan militarist
policies resulting in destabilization of the Middle East and Asia where North
Korea has been a focal point. President Xi signaled that the US has abdicated
its role as catalyst to global integration under international conventions and
institutions whereas China is there to lead within the existing structure and
institutions of international capitalism.

Even US strategic
allies pursue multidimensional relations by accepting Chinese leadership in the
domains of trade and investment, thus demonstrating that their future is in
East Asia. Beijing has been laying the foundations for a global economic empire
with trading partners that include US neighbors like Mexico and Canada. Ironically,
while Washington is pursuing military encirclement as part of a containment
policy toward China, Beijing is pursuing economic encirclement of the US, all
along claiming that global trade requires stability that US militarist policies
threaten. The question is whether US military containment policy will be
sufficient to slow down China from pursuing global integration under its aegis,
while making the US even more dependent on Chinese exports in exchange for
buying US government bonds to keep the dollar strong.

The
contradiction of American foreign policy is that the US retains global military
hegemony while some of its close allies are economically integrated with China.
This is very clear in the case of Asian countries even where there are US
military bases as in the Japan, South Korea, Malaysia, and Philippines. While
militarism has become America’s single most important leverage in global
affairs and an integral part of the domestic economic stimulus, China is
pursuing hegemony through global trade. Economic dependence on China and
simultaneous military dependence on the US is a reality even in NATO countries
where the US has used its influence to stop governments like Greece under
EU-IMF austerity from selling some national assets to Chinese interests.

Managing its
imperial interests almost exclusively by relying on its military might and
securing multi-billion dollar defense contracts, as was the case in May 2017 with
Saudi Arabia and Gulf States, the US projects the appearance of ensuring
superpower status for the duration. In point of fact, the US conceded civilian
economic leadership to China longer term while weakening its national economy
by remaining narrowly focused on exorbitant defense spending and neoliberal
policies resulting in massive capital concentration.

Inordinate
reliance on the military affords a false sense of security and power because no
country in the history of the world has survived for very long spending
massively on defense at the expense of a weak economy. (Paul Kennedy, The Rise and Fall of Great Powers. 1987)
Nevertheless, there are calls by Trump and
both Republicans and some Democrats to rebuild the navy. The estimated cost will
be an additional 20% per year over the next 30 years to the already bloated
defense budget of $620 billion. Under Obama and now Trump, the US has been
actively pursuing a new arms race in the Middle East, Europe and Asia not only
for geostrategic reasons, but to strengthen its defense industries and to force
other countries to allocate more on defense, thus securing a derivative
economic advantage by the weakening of other economies be the catalyst to
maintaining superpower status? http://www.chinadaily.com.cn/world/2017-01/17/content_27974455.htm; https://www.thetrumpet.com/13221-a-new-global-arms-race

The US is so far
ahead of the rest of the world in defense spending that it can only insist on
an arms race to provide some stimulus for its own economy while preventing
other nations from gaining any more competitive advantage in the civilian
economy. “The U.S. outpaces all other nations in
military expenditures. World military spending totaled more than $1.6 trillion
in 2015. The U.S. accounted for 37 percent
of the total. U.S. military expenditures are roughly the size of the next seven largest military budgets
around the world, combined.” https://www.nationalpriorities.org/campaigns/us-military-spending-vs-world/

The obvious
benefits to the defense industry aside, military spending at unsustainable
levels is detrimental to the civilian economy, especially when combined with
massive tax cuts for the wealthiest people in society. The result is chronic
balance of payment deficits, rising public debt and declining living standards,
downward social mobility and erosion of global competitiveness. Those
advocating stronger defense point to China, Russia, North Korea, Iran and Syria
as “existential threats” as though the US is Switzerland without a defense
sector or a nuclear deterrent. They further point to jihadist terrorism as
justification for building conventional weapons despite the inherent asymmetry between
a conventional military and terrorist who cannot possibly be deterred or
defeated militarily even if the US and its allies spent 100% of the national
budgets on defense.

Because the US is taking a back seat to China in
global economic leadership, deliberately choosing to focus on massive arms
buildup, unilateral withdrawal from the Paris Accord brought to the surface the
reality that the world capitalist system’s core is shifting toward East Asia in
part because of US policies. The US is hastening that irreversible process by
policies presumably intended to halt that eventuality, when in fact they
backfire. This is partly because multinational corporations operating
internationally invest wherever they can realize the highest return. Ironically,
the nature of capital accumulation on a world scale which has favored Chinese remarkably
rapid development means that US multinationals had a hand in undermining the
American national economy in favor of China where they are chasing lower labor
costs and a large domestic market share that they helped to create.

No matter the finger pointing at China, Mexico,
Canada, Germany and other countries, de-capitalization, which clearly hurts the
national economy and public finances, starts with policies designed to
concentrate capital especially in speculative sectors where nothing is produced
and money is made by recycling investment in financial markets benefiting the wealthiest
Americans. Decrying Chinese currency, trade, and fiscal manipulation by the US which
has its own manipulation issues may be politically receptive rhetoric for
frustrated populists and economic nationalists, but it does not alter any
empirical realities of how capital accumulation on world scale works and it
does nothing to slow down China’s ascendancy.

Just as the Chinese have created their problems with
inequality, corruption, pollution, etc. so has the US created its own problems among
them weakening the state structure. Under globalization, neoliberal policies have
actually weakened America’s state fiscal structure. Hegemony of markets over
states under the neoliberal model entails using the state as a conduit to
transfer income from the mass taxpayer to corporations and the wealthiest
Americans and privatizing public services to strengthen a private sector that
would otherwise be much weaker without public money flowing into it. This
process has sacrificed a strong fiscal structure that could have acted as a
driver for economic growth instead of confronting a GDP-public debt ratio of
106% with the prospect of rising above 120% in the next five years.

American unilateralism, economic nationalism and isolationism
are reactions to the weakened state structure manifesting itself in weakened national
sovereignty. When Trump uses populist rhetoric such as “Make America Great Again”,
it is a tacit recognition that globalization undercuts America’s national
sovereignty and favors other countries despite its positive derivative benefits
of globalization to America’s multinationals. To gain the advantage, the US
wants more incoming investment and capital repatriation (estimated $3 trillion),
combined with a monetary and trade policy by other countries such as China that
enjoy a surplus at the expense of the US. In short, the strategy is to use
government policy as the sole mechanism to address the disequilibrium America has
been suffering in its balance of payments deficit.

Of course, without
China buying US treasuries, the US would have a much weaker dollar because of
the public debt. Of the $19 trillion US public debt, $6.3 trillion is
foreign-owned, $1.1 trillion by China and an equal amount by Japan, both
enjoying a surplus at the expense of the US. In June 2017, China announced that
the national currency has stabilized sufficiently to the degree that Beijing
was prepared to purchase even more US treasuries. As an export economy, China
favors a strong dollar as does Japan. Washington’s long-standing policy of
maintaining an artificially high dollar has benefits but it also entails that the
consumer-driven American economy suffers chronic balance of payments deficits.

Are unilateralism, neo-isolationism, and economic nationalism
the road to “Make America Great Again”, or do the rightwing populist president and
his political, business and media supporters keep blowing a lot of smoke across
the world while benefiting certain business sectors at the expense of others?
Few doubt that withdrawing from the Paris Accord was a case of blowing smoke; a
symbolic ideological/political gesture of projecting the illusion of American
strength when in reality it brought to the forefront deep-seated structural
weaknesses in a society already deeply divided and becoming weaker internationally
because it refuses to alter course in its political economy.

The framework of US foreign policy

As Western Europe and Japan began to reindustrialize
while USSR and China developed massive defense sectors during the early Cold
War (1945-1960), American decline began to take place. In 1958, the IMF warned
President Eisenhower about chronic balance of payments deficits impact on the
dollar’s artificially high value as a reserve currency. Although Eisenhower
warned the nation about the military industrial complex, the US pursued “Military
Keynesianism”, massive defense spending as a means of stimulating economic
growth while also strengthening its defense alliances to keep its superpower
status.

Using the artificially high dollar as a reserve
currency afforded the US the luxury of “guns and butter” as the Johnson
administration argued in pursuing the war in Vietnam and the “Great Society” social
welfare program. Naturally, there were limits to “guns and butter” dreams that
turned into nightmares in the mid-1970s when the US lost the Vietnam War and
realized that a multi-polar world structure was slowly threatening its
hegemony.

In a position to pursue unilateralism when it suited
its interests, while reverting to a multilateral approach when there is no
choice, the US used its preeminent global defense network to exert political
and economic influence. This is something that both Republican and Democrat
administrations have done since Harry Truman. It is one thing to go at it alone
when all nations in the world are weak as was the case from the Truman to the
Nixon administration. It is entirely another matter when the US share of global
GDP has shrunk by 50% between 1960 and 2014 (from 40% to 20%).

While China’s share of world GDP stands at 15%, it
contributes 30% of the world’s growth. The annual GDP growth under 2% in the
last ten years and high probability that it will remain at those levels in the
next five years is a reflection not just of the structural weakness of the US
economy but the dispersed nature of the global power in the second decade of
the 21st century. The IMF among other organizations do not expect the US to be the engine of global growth, looking instead to Asia. The persistence of ideological unilateralism against the
realities of American waning global influence is not only demonstrated by US
taking itself out of the Paris Accord, which Obama and his supporters have criticized,
but even under Obama who claimed that he would pursue multilateralism but in
practice deviated.

In February 1914, Assistant Secretary of State Victoria
Nuland imposed unilateralism when it came to US policy to manipulate Ukraine’s
internal politics at a time that the EU was more cautious because of its
dependence on Russian natural gas and as a trade partner. While seeking
multilateral cooperation, the US position remained one of unilateral decision
only to be validated by a multilateral political cover. Despite its severe
limitations, unilateralism projects the image of strength while multilateralism
is often seen as weakness because it means yielding in negotiations with other
countries.

Not just those immersed in the imperialist ideology of “American Exceptionalism”,
but militarists and economic nationalists would argue that unilateralism is
best suited to serve national security and economic interests. One problem is
that US-based multinationals operate in an international arena where US policies
intended to achieve advantage over other nations could undercut US corporate
interests. This is precisely the case with NAFTA partners Canada and Mexico
that the Trump administration has singled out as unfair competitors. In fact,
US-based corporations and portfolio investors in Canadian and Mexican stock
exchanges have benefitted from the regional trading bloc.

Under the neoliberal corporate welfare economic model,
the US cannot compete with China’s quasi-statist development model seeking to
integrate as much of the world economy as possible under its aegis.
Demonstrating remarkable military restraint in the past three decades in
comparison with the US, China’s economy is not based on “Military Keynesianism”
and its main goal is not military containment but economic expansion. US
military containment of China, which is also intended to contain China’s global
economic expansion, runs into contradictions because US corporations among
others from around the globe profit from Chinese expansion and want it to
continue. This contradiction has frustrated the American political, military
and some US manufacturers, forcing them to embrace economic nationalism.

Oddly enough, the Paris Accord from which the US
withdrew reflects these contradictions of a government unable to cope with the
country’s continued economic decline under the neoliberal-corporate welfare
model. Disagreements among capitalists from the Koch brothers opposed to the
Paris Accord to Michael Bloomberg in favor of it reflects not just ideology,
politics, and which vision of the future will prevail, but how government will
allocate resources from which certain corporations benefit. Considering that
climate-related economy has enormous potential, it could represent as much as
one trillion in the US economy of about $17 trillion.

Considering that the US was the main force behind
multilateral organizations, including the United Nations and its various
sub-agencies, the IMF and World Bank, General Agreement on Trade and Tariffs
(GATT, now WTO), it is ironic that Washington would strongly defend them when
it serves its narrow interests and try to bypass if not undermine them when it
sees them as obstacles to its prospects of remaining hegemonic. The creator of
multilateral organizations rebuffs its own creations because the world has
changed to the degree that other countries exercise influence in multilateral
organizations the US cannot use as its sole foreign policy instruments as it
did during the early Cold War.

Based on the foreign policy record under Obama,
Washington has been pursuing a going alone policy when it can get away with it
and multilateral policy when it needs to do so. As an isolationist and economic
nationalist, Trump is simply more skeptical about multilateralism and sees it
as an impediment to “America First”, even if this means questioning close ties
with historic allies or proposing a Muslim travel ban that hurts cooperation
not just with Muslim nations, but EU allies and US corporations in the tourism
business.

EU and non-EU countries alike are confronting American
unilateralism by looking for a multilateral partner. China with its
multibillion “One Belt, One Road” global economic integration program is
waiting to play an even greater global role. With the goal to cover 65% of the
world’s population and one-third of global GDP, China’s 21st century
Silk Road is a sharp contrast to the US determination to retain superpower
status by remaining narrowly focused on a new arms race and stimulating the
defense sector as though it is the panacea for economic development.

The new Asian Infrastructure Investment Bank will need
several trillion dollars to provide financing for China’s global economic
expansion plans. Despite US objections, many countries and companies throughout
the world including close U.S. allies have signed on to China’s infrastructure
bank. Just as they accepted the IMF decision to have the Yuan as part of the basket
of hard currencies, governments other than the US realized it was in their
interest. That US multinational corporations have fallen in line with Chinese
global economic leadership as much as European and South Korean is indicative
that capital, which goes where it can realize the highest profits, has
essentially validated the reality of a multi-polar world in which the US is in
relative decline and militarizing instead of focusing on the civilian economy.

On June 1, 2017,
the EU declared that along with China it would fill the leadership role against
the background of the vacuum the US is leaving by withdrawing from the Paris
Accord. The three main goals are: 1. The global average temperature increase
held below 2 °C above pre-industrial levels, while temperature increase 1.5 °C
above pre-industrial levels; 2. Lower greenhouse gas emissions without
threatening food production; 3. Financial decisions to be made consistent with
a pathway towards lower greenhouse gas emissions and climate-resilient
development.

Multinational
corporations support the Paris Accord for a number of reasons, including the
fact that it would be implemented in many countries within the framework of the
neoliberal model where government incentivizes the private sector to adopt new
technologies. “American taxpayers footed a $16.6 billion bill (in 2007) for energy
subsidies, tax breaks, loan guarantees, and the like in 2007 alone, according
to data from the U.S. Energy Information Administration (EIA). That’s more than
double the Federal subsidy level from eight years earlier. In fact, on an
energy fuel basis, Congress has increased subsidies for renewable fuels
considerably, from 17 percent of total subsidies and support in 1999 to 29
percent in 2007.”http://instituteforenergyresearch.org/studies/energy-subsidies-study/

The Paris
Accord, which Obama signed in 2014 but the Republican-dominated Senate never
ratified, pledged billions in subsidies to corporations pursuing renewable
energy technology. It is true that fossil fuel industries also benefit from
government subsidies and from a fiscal policy that allows many to pay the least
amount in taxes, regardless of the theoretical 35% tax rate. However, there is
also the issue of international competition in new technologies that made it
necessary for US-based multinationals to follow the trend of their rivals
overseas.

There are political,
economic, and scientific dimensions to this complex issue which on the surface
appears to be solely about the environment and the 2 degrees Celsius ceiling. The
withdrawal from the climate change treaty by the embattled Trump administration
is symbolic of American unilateralism as an affirmation of national sovereignty
supposedly undermined by liberal environmentalist-multilateral advocates who
have impeded the fossil fuel industry from maximizing profits through heavy
regulation and restrictions on drilling. It is also about the appearance of yielding
the advantage to China and India whose economies are growing three times faster
than the US using fossil fuels.

When it comes to
providing the infrastructure, subsidies, tax incentives and loan guarantees for
private companies, including those in the renewable energy business, the role
of government is catalytic in the existing corporate welfare state. The
questions of national control and international competitiveness are valid as
much by the US as any other country. Because it is simply impossible to work
toward clean environment on a country-by-country basis as though each country
is on another planet, US withdrawal from the Paris Accord demonstrated a
superficial understanding of globalist capitalism and its short-term and longer
term benefits to each country.

Nor does it help
to argue against scientific consensus and to claim that climate change is a
hoax and a Chinese invention intended to afford China an advantage over the US.
Backed by a number of Republicans and powerful businessmen like the billionaire
Koch brothers, Trump wanted to demonstrate America’s ability to stand alone as
a global hegemonic power against the reality of a slow decline in a world that
is multi-polar world where China would derive more advantages than the US.

Naturally, as a
result of the Republican decision against the Paris Accord the private sector
had some tangible winners and some losers. There are estimates that the clean energy
domain and derivative industries ranging from high tech to solar power could be
worth several trillion dollars by 2030. Just as multinational corporations will
adjust and make profits without the Trans Pacific Partnership treaty that Obama
had negotiated but Trump dumped, similarly corporations will do the same with
the Paris Accord withdrawal until the next administration comes along to
reverse course.

Cheap renewable
energy and natural gas out-competing fossil fuels obviate anything the US does
in terms of climate change policy, especially considering that multinational
corporations and banks have already invested heavily in renewable energy.
Europe’s and China’s solar power manufacturing capacity, which is larger than
any other in the world, has been the driving force behind policy on reducing
emissions but US multinationals fervently support it because they know the
clock cannot be turned back to the age of coal.

As a strong
supporter of the Paris Agreement, China still remains coal-dependent and emits
more carbon dioxide than any other country on earth, followed by the US, and
India. This allows the US a modicum of a political safety net while it preaches
compliance to the world. It is easy of course for the Western industrialized
countries to preach environmental policies to the developing nations that are trying
to develop their industrial sector. When the Western World was industrializing (18th
century England, 19th century continental Northwest Europe, US, and
Japan) had no environmental standards and all pollution emanated from the West.

Although
voluntary, Paris Accord implementation is very expensive for poorer countries
that need foreign aid. Keeping within the economic nationalist-unilateralist ideological
framework, the Trump administration criticized the climate agreement that
called for rich nations to provide foreign aid to poorer ones dealing with
climate issues and a green economy. It is hardly a secret that the loose
environmental laws of developing nations along with cheap labor and domestic
market share are the reasons that Western-based multinationals decide to invest
there.

Some of the
world’s biggest polluters are multinational corporations and the beneficiaries
their investors in wealthy nations. Middle class consumers in advanced
countries wholeheartedly but hypocritically embrace the environmental movement,
as long as they derive the benefits in cheap products while pollution is not in
their own land. Without question, the environmental issue is both a class issue
and one of developed vs. developing nations that goes to the heart of uneven
income distribution geographically and along class lines.

The class-based nature of environmental politics
aside, the Trump administration’s decision to withdraw from the Paris Accord reflects
the gap that the US is creating by permitting China to accept the leadership
scepter of the new technologies of renewable energy sources and forging ahead
with the rest of the world toward the renewable-energy economy of the future. Presumably,
this means that well-paying jobs in the clean energy and related fields are
inadvertently lost to competitors, thus contradicting the argument that the
Paris Accord costs jobs in the anachronistic fossil fuel domain instead of
creating many more in renewable energy and derivative sectors.

To prove that multilateralism was wasteful by draining
US taxpayer money, Trump claimed that more than $1 billion had gone to the UN Framework Convention on Climate Change
intended to support natural resource management in poor developing nations. In
reality, the US had pledged $3 billion to that fund, but had only paid $500
million. Considering the US contribution to carbon emissions since the nascent
phase of its industrial development, and considering the emissions of US
multinationals around the world, contributing for the collective effort of a
clean environment may seem very unreasonable to unilateralist “American
Exceptionalists” who remain in an imperialist mode of thinking of colonial powers
dictating the terms to client states.

Withdrawal from the Paris Agreement was part of a pattern
in US policy casting doubt on the wisdom of multilateralism because such a
course does not serve certain corporate interests while contributing to the
chronic balance of payments deficit and rising public debt. Although the
science behind climate change and the need to protect the environment are
empirically verifiable, and although all life forms from humans to birds and
sea-life benefit from a clean environment, the political economy under which
environmental policies are executed favor corporate interests. One reason that Republicans
have been effective appealing to the irrational is because many among the
popular masses see the environmental issue as part of liberal identity politics
that the wealthier middle class embraces.

There is no
question that political parties around the world have been using this issue to
deflect attention from social justice subordinating it to the environmental
agenda. Just as the Democratic Party in the US has been using the Cold War
anti-Russia controversy to oppose Trump and mobilize popular support away from
social justice issues such as free college education, free universal health
care, and higher living standards, similarly it has used climate change to
co-opt the popular base into the neoliberal mainstream.

The day after
Trump took office there were mass demonstrations for social justice in major US
cities; a seemingly grassroots effort expressing opposition to authoritarian
politics. The day after the US pulled out of the Paris Accord there were
popular demonstrations demanding Trump tell the truth about his
administration’s Russia links, as though the Russian-Trump controversy
regardless of its merits is somehow catalytic to social justice and the lives
of people. Higher living standards, universal free healthcare, free college education,
all issues of the Bernie Sanders wing of the Democrat Party have been
subordinated to Russia. Despite its sound scientific merits, the Paris Accord
like the Russia-Trump issue is one around which media have rallied reflecting
the Democrat Party’s agenda.

Indubitably, America’s withdrawal from the Paris
Agreement revealed a contradiction between the persistence of ideological
unilateralism and the realities of America's declining power in the world. It
also revealed the deep divisions among capitalists. Although rightwing
billionaires financing the climate change deniers stand to profit because their
industries do not have to comply with environmental regulations, they project
an ideological position that unilateralism is inexorably linked to patriotism
and its abandonment a reflection of weakness and lack of resolve on the part of
US leadership. Therefore, the illusions inculcated by the media into the minds
of the masses are illusions that American elites project.

Conclusions

Coordination and macro-management of the world economy in consultation and
cooperation with the rest of the world seems to be in doubt under Trump when
compared with the previous administration. Nevertheless, there is a debate
among America’s political, business, media, military and academic elites
whether the future of US policy is toward greater unilateralism that many
equate with strength and the glory of Pax Americana or a multilateral approach
that reflects the new realities of the global power structure.

Because the US
has moved so far to the right since the Kennedy-Johnson administrations to the
degree that political choices in 2016 were between a rightwing populist
Republican and a neoliberal militarist, voters were faced with choices placed
before them by the corporate elites who completely disregarded social justice.
The rhetoric notwithstanding, neither of those choices provides upward social
mobility opportunities and neither offered a platform that would stimulate the
civilian economy back into rapid growth mode. The only agreement was on
strengthening defense, as though this sector would guarantee global
competiveness and domestic upward mobility.

Given the
asymmetry between its military might and declining share of global GDP, the US
is unable to stop the clock that is ticking increasingly louder in Asia that is
destined to be the center of world capitalism. Continuing with Cold War
“Military Keynesianism”, military interventions and counterinsurgency
operations to destabilize countries where the US wishes to exert influence at
the economic, political and strategic levels has obvious limitations. After
all, the US under George W. Bush and Barak Obama spent an estimated $4 trillion
for wars with only public debt and lower living standards as the legacy to tax
payers.

Ideologically, the US elites are so indoctrinated into
the mindset of “Exceptionalism” and Cold War militarism that it is
extraordinarily difficult to face the empirical realities of the multi-polar
global power structure even when it comes to climate pacts. The vast network of
active foreign, defense and intelligence policy staff, consultants, and the
media reflecting the status quo are holding on to anachronistic models of
growth and development as they are to military operations. The example of
endangering South Korea’s security to provoke North Korea by deploying THAAD
missiles, only to be rebuffed by president Moon Jae-in of South Korea speaks
volumes of how reckless American militarism has become and how arrogance of
power is the driving force behind unilateralism.

Refusing to examine internal contradictions in the
“Military Keynesianism” and neoliberal approach to superpower status, the
American elites, the media, consultants and many academics insist on wearing
blinders. Consulting firms, government agencies, media companies, private
corporations and even many educational institutions hire people who operate
within the framework ranging from the neoliberal Cold War militarist to the
rightwing populist bordering on Fascism. The result is recycling of more of the
same and the race to outdo one another on who offers the “best” solution within
a framework leading to decline.

Scholars, political and business observers pointing to
China’s many internal problems as impediments to its ascendancy may be right.
However, they view China through the prism of Western institutions, policies, values
and with a neoliberal bias they wish to impose on China as part of a
transformation policy the US imposed on the entire Western World after the end
of WWII.

Even if everything goes absolutely wrong for China as
critics argue while everything goes absolutely right for the US and the EU in
the next half century, there is still the issue of global interdependence and
what it would mean to the entire world if China lapses into a chronic crisis.
Western-based corporations, portfolio investors and governments have no
interest in a China that will collapse, knowing they benefit by its continued
expansion. Ironically, many countries, including the US, are so well integrated
with the Chinese economy that it is in their interest to keep it growing, relatively
strong, and stable.

The economic crisis that started in the US with Lehman
Brothers on the road to bankruptcy in August 2007 amid the subprime lending
environment which lasted until 2012 in some countries and much longer in others
provides a good lesson of why Chinese economic power is catalytic to global
stability. As exports dropped 18% in 2007-2008, China provided a massive growth
stimulus ($586 billion or 13% of GDP). The US-based great recession’s impact
would have been much worse than that of the Great Depression of the 1930s if it
were not for China enjoying the world’s fastest and highest GDP growth while
providing a stimulus to capitalism amid the most severe global economic
contraction since the 1930s. Even with Trump and world populism and economic
nationalism on the rise, it is difficult to see many governments and multinational
corporations not advocating China’s ascendancy, even if many favor self-imposed
growth limits to achieve greater global equilibrium.

"A
gripping, passion-filled, and suspenseful tale of love, betrayal,
political and religious intrigue, this novel entices the reader’s
senses and intellect beyond conventions. Slaves to Gods and Demons
takes the reader through a roller coaster enthralling journey of
personal trials and triumphs of a family emerging vanquished and
destitute after World War II.

Narrated by a young boy, Morfeos, modeled after the Greco-Roman pagan
deity of sleep and dreams, the book reveals the soul of a people trying
to ascertain and assert their identity while rebuilding their lives and
recapturing the glory of a lost civilization.

Seeking liberation from restraints of time, social conventions, and
binding traditions, the deity of dreams provides the conformist and the
free-spirited characters in the novel with venues for redemption that
are mere paths toward illusions. Exploring the complexities of human
relationships shaped by priest and politician alike, the novel rests on
the central theme that life is invariably a series of illusions, some
of which are euphoric, most horrifying, all an integral part of daily
existence.

Striving for purpose amid life’s absurdities after the destruction of
western civilization in two global wars, the characters in Slaves to
Gods and Demons struggle between holding on to the glory and grandeur of
a pagan legacy and the Christian present shaped by contemporary
secular events in Western Civilization."